Director of Mines and Geology vs BMM Ispat Ltd 2026 INSC 627 - MMDR Act

Mines and Minerals (Development and Regulation) Act, 1957 - Main facets of Section 9:- 1. Existence of a Mining Lease The provision applies to the holder of a mining lease, whether granted before or after the commencement of the Act. 2. Removal or Consumption of Mineral Royalty becomes payable when any mineral is removed or consumed from the leased area. 3. Persons Covered The liability extends not only to removal or consumption by the leaseholder personally but also by his agent, manager, employee, contractor, or sub-lessee. 4. Rate of Royalty Royalty must be paid at the rate for the time being specified in the Second Schedule of the Act. The rate to be paid shall not be enhanced more than once every three years. 5. Power of Central Government to Amend Rates The Central Government may, by notification, amend the Second Schedule to enhance or reduce royalty rates, but enhancement cannot be made more than once within a period of three years. 7. So, for Section 9 to be applicable to a given set of facts, there must be an existing mining lease; there must be removal or consumption of mineral, and the person who has done the above two acts, must be covered by the text of the statute. [Context: The issue in this case was whether enhanced royalty under Section 9 of the , following a statutory amendment, could be levied in respect of iron ore already sold through e‑auction but lifted after the date of enhancement. The Court held that royalty, being a statutory impost linked to the removal/dispatch of minerals, must be paid at the rate “for the time being specified” in the Second Schedule as on the date of movement of minerals, and any contractual term or prior understanding between the parties cannot freeze or limit the effect of a subsequent statutory increase. Consequently, the Supreme Court upheld the deduction of the additional 5% royalty made by the State from the security deposit and set aside the judgment of the High Court.]